Health Insurance Options in Germany - 2010

Germany has a reputation for having one of the best health care systems in the world, providing its residents with comprehensive health insurance coverage. Approximately 85% of the population are mandatory or voluntary members of the public health scheme while the others usually have private health insurance. The health insurance reform of 2007 now requires everyone living in Germany to be insured for at least hospital and out-patient medical treatment. This must also include coverage for pregnancy and for certain medical checkups. There will supposedly be more competition between the various insurance providers but to change between the two systems will be made more difficult than before.

The costs of the German health care system are immense and rising due to demographics as well as long-term unemployment rates. Recent government reforms have attempted to make hospitals more competitive and thereby reduce costs for the state health insurance providers (Gesetzliche Krankenversicherung or GKV). Reduced benefits for dental work, increased out-of-pocket payments for those seeking treatment and an additional 0.9% insurance premium above and beyond the 7.3% of regular income to be borne by the member alone were measures introduced in 2005. Efforts to cut the social security cost for employers and reduce the monthly cost for state health insurance members were controversial and after a very long and drawn out political battle, a further health reform compromise was reached which went into effect in 2007. The latest major change is the introduction of the Gesundheitsfonds which is a monstrous collection and distribution fund for all monies paid into the GKV as of January 1, 2009.

The options available to you for health insurance while living in Germany are the government-regulated public health insurance system (GKV), private health insurance from a German insurance company (PKV) or a combination of the two. You can opt for full private plans if your income is above a certain threshold or if you are self-employed. Finding the best service provider of state health insurance or finding the most suitable coverage from a private health insurer at a competitive rate is not always easy but it is well worth the effort. As people have different requirements or expectations from health insurance, it is important to understand the system in order to filter out the most suitable plan while living in Germany.

Government Health System

Most German residents (approximately 70 million people) are members of the government health system. If your gross salary is below 49,950 Euros per year or 4,163 Euros per month (2010 figures) then membership in the GKV is mandatory. The government health insurance scheme is administered by Krankenkassen and they all must charge the same rate. Therefore there is no longer competition based on price but only on service and possible refunds. The cost of government health insurance is currently approximately 15 % of your eligible gross salary to a maximum monthly limit of 3,750 Euros income. If you earn more than this you do not pay a higher insurance premium.

Assuming you pay the maximum monthly premium of 570 Euros as an employee earning at or above the threshold and are therefore a voluntary member, your contribution is approximately 300 Euros and your employer pays approximately 270 Euros. The benefits include in-patient (hospital) care as a ward patient with the doctor on duty at your nearest hospital, out-patient care with registered doctors (Kassenärzte) and basic dental care. Please note that there is no coverage for private doctors or surgeons, a private room in hospital, alternative/homeopathic medical care, dental implants, vision products for adults or benefits outside of Europe. Your non-working dependents living at your address in Germany are presently insured at no additional cost and simply need to be registered with the Krankenkasse.

If you choose to join the German government system, you can register very simply with any of the present 170 Krankenkassen in Germany which are non-profit associations administrating the government health scheme. Some (for instance AOK, BEK, DAK) are very large with millions of members and others (often called BKKs) might have just a few thousand members. This does not mean that the benefits are very different as all health insurance funds must stick to the government regulations on the minimum they offer. A Tip: Claims handling, local convenience and perhaps special programs could be different, but if you ask about the possibility of communicating in the English language you are likely to be disappointed, though a limited number employ English speakers.

You and your dependents must also become members of the government long-term nursing care scheme (Pflegeversicherung). This covers some of the cost of meeting personal nursing needs, such as the feeding and bathing of those who become substantially disabled. This presently costs 1.95% or 2.2% of your gross salary (maximum of approximately 83 Euros per month) of which your employer pays half.

You can switch government health fund providers by giving two months notice if the premiums are increased. The general minimum period of membership with a Krankenkasse is 18 months.

If you would like supplemental insurance coverage to top up the government system benefits, you can purchase a supplemental policy from any private insurance company, German or international; for instance if you would like a private doctor and a private room in hospital, homeopathy and other alternative treatment or higher dental reimbursements. Emergency evacuation from places outside Germany and travel insurance should also be considered as these are not paid for by the state health insurance plan and their cost is low.

Public health insurance funds have recently begun to offer supplemental insurance plans from a particular provider, offering a group rebate. Please be aware that you would then be committed to them for three years and could not cancel even if premiums are increased. Such tied plans are largely unnecessary as you have a wider choice of benefits on the private health insurance market.

Private Medical Insurance

Generally, private health plans cover a wider choice of medical and dental treatment and provide broad geographical coverage. By having private health insurance you are considered a private patient and can expect more service from the medical profession; the costs are also higher than for government patients. The hospitals and doctors depend to a certain extent on private patients to supplement their incomes and therefore welcome them. A private patient can also request and will often get, doctors who speak their native language. The private medical insurance market is well served by about 50 German insurance companies, and there are premium/benefit combinations available to suit most budgets. The per person cost of full medical insurance is based on the benefits chosen, as well as on age, gender and any pre-existing conditions that those persons to be covered may have had.

Please note: The government insurance premium covers you and all your non-working dependents, whereas the private medical insurance premium is generally paid for each person covered. You can reduce the monthly cost of your private insurance by agreeing to a deductible. German private health insurance companies are not allowed to cancel your policy if you submit claims and are also required to put 10% of your premiums aside as a provision towards keeping the cost stable at retirement. If you are considering purchasing an expatriate health insurance as a substitute for the government scheme this could be quite stressful because many of the foreign insurance companies are not registered with the "BaFin" to do business in Germany. Even those that are find their health insurance plans do not meet the standards set in the new reforms. The crux is that the German government insists that there may be no set upper limits on reimbursement levels and there may be no annual out-of-pocket deductibles higher than 5,000 Euros. Other issues involve how the insurance premiums are calculated. The present situation (April 2009) is that none of the expatriate health insurance companies may legally provide a certificate recognized by all visa authorities in Germany. Whether or not this will change depends on the German's fully recognizing European directives for cross-border selling of health insurance for non-Germans seeking a residence permit.

Be careful to avoid limited-term policies with no requirement for medical underwriting. These policies very rarely offer a permanent extension and do not cover pre-existing conditions. If you decide to stay longer than the limited contractual term (anywhere from one to five years) and the health insurance contract expires, it could be both difficult and much more expensive to get new health coverage at that point. In addition, even though you may have purchased such a plan from a German health insurance company upon arrival in Germany, it may not be recognized by the visa authorities and you will be forced to purchase a permanent health insurance plan in order to stay.

Additional information for employees:

You may choose to purchase private health insurance (Private Krankenversicherung or PKV) instead of joining the government health plan if your gross salary is more than 49,950 Euros per year. Self-employed persons, German civil servants and those persons working part-time and earning less than 400 Euros per month are also eligible.

Please note: If you are an employee you must also prove that you earned more than the threshold amount of income in each of the past 3 calendar years. If not, you will automatically be registered as a compulsory member of the government system and will not be able to change to a private insurance plan until you have met this requirement for 3 consecutive years. This is the result of the newest health insurance reform and is intended to force those people earning higher incomes to remain in the government system for a longer period of time.

If on arrival in Germany you wish to be privately insured, you will need to inform your company's human resources department promptly to avoid possible confusion; otherwise, you may find yourself automatically registered in the government system.

On the other hand, if you have earned above the earnings threshold in the past 3 years and will do so in the coming year, have never been previously insured in Europe in a government scheme at all or cannot prove that you were a member of the German government health insurance for at least 36 months in the past 5 years you will be forced to purchase a private health insurance plan as you do not qualify as a voluntary member of the German state system.

If you purchase a private medical insurance plan from a German health insurance company that provides a certificate recognized by the German government (Par. 257 SGB V Arbeitgeber-bescheinigung) you may take advantage of the same employer subsidies as a government plan member. This translates to approximately 300 Euros per month of employer subsidy towards the cost of your private health insurance policy. If such certification is not provided, your employer has the option, but is under no obligation, to compensate you for part of the cost of your medical insurance. Most German employers now demand this certificate as proof that your insurance benefits meet the regulations.

Additional information for self-employed or non-employed persons:

Another measure of the health reform bill of 2007 is that all self-employed persons had to be insured after July 1, 2007 and can purchase private health insurance if they were previously privately or even uninsured. It is now illegal to be uninsured.

The German private health insurance companies are now forced to accept all applicants, irrespective of their health situation, in their "Basistarif" which has become available from January 1, 2009. In other words, if you have a serious pre-existing medical condition and cannot be accepted into normal private health insurance tariffs, you can purchase this tariff as a last resort. It offers similar benefits to the government system and the cost is capped at the rate of the Krankenkasse. Unfortunately the rate is approximately 570 Euros per month for each adult and approximately 250 Euros per dependent child. There is a possibility to apply for welfare support if you cannot afford to pay these amounts.

If on the other hand you are basically in good health, you should try to purchase suitable benefits plans from a German private health insurance company willing to accept non-Germans. A qualified insurance broker specialized in expatriates should be consulted.

If you are self-employed and were already covered by an international insurer before the cut-off date of April 1, 2007, you should check to make sure your coverage is suitable for living in Germany. You will probably need to prove that your insurance is still in force and provide some certification in the German language to the visa authorities.

If you would like to keep the non-German insurance please note that you must in any event still pay into the government long-term nursing care scheme (Pflegeversicherung) and may also wish to purchase supplemental sick pay insurance. This may be difficult to find as German insurers are not particularly keen on insuring self-employed foreigners.

Sick Pay Insurance

Should you fall ill while in Germany, your employer will normally pay six weeks' full salary; after which the government scheme health insurer (Krankenkasse) pays a percentage of your income, up to approximately 2,200 Euros per month, as statutory sick pay (Krankengeld) for up to 78 weeks.

If you are earning more than this per month, it would be worth considering the purchase of supplemental sick pay insurance, which is available at reasonable rates. This is particularly important if your fixed living costs are higher than 2,200 Euros. If you purchase private medical insurance, you should also consider purchasing adequate sick pay insurance. Please note that neither sick pay insurance nor the government scheme covers permanent disability and it is assumed that you will be returning to full employment. You should consider purchasing a separate policy for permanent disability and critical illness.

Travel Insurance and Evacuation Benefits

The German public health insurance system will provide you with limited cover for travel within the EU. If you need medical care while traveling to another EU country, you will normally need to take the necessary EU forms with you when you travel. You will be required to pay the medical costs yourself and then to fill out the necessary EU forms in order to apply for a reimbursement on your return. You will be reimbursed for the amount that the German system would have paid for the treatment - sometimes only a fraction of the actual cost you paid.

If you wish to be covered for the full amount of any medical outlay or plan to travel to non-EU countries, you should purchase a travel insurance policy. The German government health system does not cover medical evacuation from foreign countries. Please note that not all travel insurance policies cover evacuations, so always check the fine print before signing up.

Dental Care

In Germany, dental care can be expensive. For major dental work involving bridges, crowns or orthodontics, you must get a cost estimate and present it to your insurer prior to treatment; otherwise you could be faced with a very high bill to be paid out of your own pocket. If you have doubts about a recommended treatment, get a second opinion. And please watch out: German dentists have a reputation for sometimes suggesting complicated and unnecessary dental work. The reimbursement amounts are calculated based on a fixed price depending on the case and you can expect to pay between 30% and 80% out-of-pocket for dental work if you do not have supplemental dental insurance. The fixed price system uses the absolute minimum standards and does not cover gold, porcelain or other materials. Supplemental dental insurance is worth considering if you would like to avoid unpleasant surprises.

Pharmacies

Germany has an extensive network of pharmacies (Apotheken), with branches on just about every second corner in town, easily recognized by big red "A". The state health insurance generally provides reimbursement for prescription generic drugs, though with a co-payment, the scale of which depends on the cost of the medication. Prescription drugs for children have no co-payments. If you are privately insured, brand-name medication will be covered, as long as you have a prescription. You will have to pay the full cost of the prescription medicine upfront and then submit the bills to your insurer for reimbursement. However, do not expect to be reimbursed by either the government or private health insurance for over-the-counter remedies.

Also see our article "Insurance: It's the Law" for a complete overview of ALL types of insurance in Germany.

Copyright
Cathy J. Matz-Townsend
International Insurance Broker
Hainstrasse 2
61476 Kronberg, Germany
matz@insure-invest.de
www.insure-invest.de

All information is provided to the best of our knowledge as of February 2010 but we can give no guarantee for its accuracy or completeness.

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